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Attorney General Reyes Joins Third Price-Fixing Investigation Into Generic Drug Industry

FOR IMMEDIATE RELEASE:
June 10, 2020

NEW ANTITRUST PRICE-FIXING INVESTIGATION FOR GENERIC DRUG INDUSTRY
AG REYES JOINS COALITION FILING 3RD COMPLAINT

Ongoing Investigation Built on Evidence from Multiple Cooperating Witnesses, 20 Million+ Documents, Phone Record Database Containing Millions of Call Detail Records for Over 600 Sales and Pricing Individuals

SALT LAKE CITY – Utah Attorney General Sean D. Reyes has joined a third antitrust investigation lawsuit into price-fixing by generic drug manufacturers. The complaint says 26 companies conspired to artificially inflate and manipulate prices for at least 80 generic topical dermatological drugs, reduce competition, and unreasonably restrain trade for generic drugs sold across the United States.

The topical drugs at the center of the Complaint include creams, gels, lotions, ointments, shampoos, and solutions used to treat a variety of skin conditions, pain, and allergies.

This new lawsuit names 26 corporate Defendants and 10 individual Defendants (listed below) and seeks damages, civil penalties, and actions by the court to restore competition to the generic drug market.  It was filed in the U.S. District Court for the District of Connecticut.

“Generic drugs account for the majority of prescriptions filled in Utah and nationwide. So it is of paramount importance that these drugs remain affordable as Congress intended when the Hatch-Waxman Act was passed over thirty years ago,” said Attorney General Reyes. “Our investigation shows these companies are working together – instead of competing against each other – in order to fix higher than market value prices. We still need to prove our case in court. But if we are right, it’s illegal behavior that is hurting Utahns and these companies must be held accountable.”

The Complaint stems from an ongoing investigation built on evidence from several cooperating witnesses at the core of the conspiracy, a massive document database of over 20 million documents, and a phone records database containing millions of call detail records and contact information for over 600 sales and pricing individuals in the generics industry. Among the records obtained by the States is a two-volume notebook containing the contemporaneous notes of one of the States’ cooperators that memorialized his discussions during phone calls with competitors and internal company meetings over a period of several years.

Details:

Between 2007 and 2014, three generic drug manufacturers, Taro, Perrigo, and Fougera (now Sandoz) sold nearly two-thirds of all generic topical products dispensed in the United States. The multistate investigation has uncovered comprehensive, direct evidence of unlawful agreements to minimize competition and raise prices on dozens of topical products. The Complaint alleges longstanding agreements among manufacturers to ensure a “fair share” of the market for each competitor and to prevent “price erosion” due to competition.

The Complaint is the third to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest domestic corporate cartel case in the history of the United States. The first Complaint, still pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2016 and now includes 18 corporate Defendants, two individual Defendants, and 15 generic drugs. Two former executives from Heritage Pharmaceuticals, Jeffery Glazer and Jason Malek, have entered into settlement agreements and are cooperating with the Attorneys General working group in that case. The second Complaint, also pending in the U.S. District Court in the Eastern District of Pennsylvania, was filed in 2019 against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. The Complaint names 16 individual senior executive Defendants. The States are currently preparing for trial on that Complaint.

Corporate Defendants:

  1. Sandoz, Inc.
  2. Actavis Holdco U.S., Inc.
  3. Actavis Elizabeth LLC
  4. Actavis Pharma, Inc.
  5. Amneal Pharmaceuticals, Inc.
  6. Amneal Pharmaceuticals, LLC
  7. Aurobindo Pharma USA, Inc.
  8. Bausch Health Americas, Inc.
  9. Bausch Health, US LLC
  10. Fougera Pharmaceuticals, Inc.
  11. G&W Laboratories, Inc.
  12. Glenmark Pharmaceuticals Inc., USA
  13. Greenstone LLC
  14. Lannett Company, Inc.
  15. Lupin Pharmaceuticals, Inc.
  16. Mallinckrodt Inc.
  17. Mallinckrodt plc
  18. Mallinckrodt LLC
  19. Mylan Inc.
  20. Mylan Pharmaceuticals Inc.
  21. Perrigo New York, Inc.
  22. Pfizer, Inc.
  23. Sun Pharmaceutical Industries, Inc.
  24. Taro Pharmaceuticals USA, Inc.
  25. Teligent, Inc.
  26. Wockhardt USA, LLC

Individual Defendants:

  1. Ara Aprahamian, the Vice President of Sales and Marketing at Defendant Taro Pharmaceuticals U.S.A, Inc.
  2. Mitchell Blashinsky, the Vice President of Marketing for Generics at Defendant Taro Pharmaceuticals USA, Inc. from January 2007 through May 2012, and Vice President of Sales and Marketing at Defendant Glenmark Pharmaceuticals Inc., USA from June 2012 through March 2014.
  3. Douglas Boothe, the Chief Executive Officer of Defendant Actavis from August 2008 through December 2012 and the Executive Vice President and General Manager of Defendant Perrigo New York, Inc. from January 2013 through July 2016.
  4. James Grauso, the former Vice President of Sales and Marketing at Defendant G&W Laboratories from January 2010 through December 2011; the Senior Vice President, Commercial Operations for Defendant Aurobindo from December 2011 through January 2014; and the Executive Vice President, N.A. Commercial Operations at Defendant Glenmark from February 2014 to the present.
  5. Walt Kaczmarek, the Senior Director, National Accounts, Vice President, National Accounts and Senior Vice President, Commercial Operations from November 2004 through November 2012 for Fougera Pharmaceuticals, a division of Nycomed US, Inc. (currently part of Defendant Sandoz, Inc.), and Vice President – General Manager, and President, Multi-Source Pharmaceuticals from November 2013 through August 2016 for Defendant Mallinckrodt.
  6.  Armando Kellum, the former Vice President, Contracting and Business Analytics at Sandoz.
  7.  Kurt Orlofski, the President and Chief Executive Officer from April 2007 through August 2009 for Defendant Wockhardt USA, and President of Defendant G&W Labs, Inc. from September 2009 through December 2016. 
  8.  Mike Perfetto, the Vice President of Sales and Marketing for Defendant Actavis from August 2003 through January 2013, and the Chief Commercial Officer for Defendant Taro from January 2013 through his recent retirement from the company.
  9.  Erika Vogel-Baylor, the former Vice President for Sales and Marketing for Defendant G&W Labs, Inc. since July 2011.
  10.  John Wesolowski, the Senior Vice President of Commercial Operations for Defendant Perrigo since February 2004.

Drugs listed in the complaint as subject to price-fixing and market allocation agreements:

  1. Acetazolamide Tablets
  2. Adapalene Cream
  3. Alclometasone Dipropionate Cream
  4. Alclometasone Dipropionate Ointment
  5. Ammonium Lactate Cream
  6. Ammonium Lactate Lotion
  7. Betamethasone Dipropionate Cream
  8. Betamethasone Dipropionate Lotion
  9. Betamethasone Valerate Cream
  10. Betamethasone Valerate Lotion
  11. Betamethasone Valerate Ointment
  12. Bromocriptine Mesylate Tablets
  13. Calcipotriene Solution
  14. Calcipotriene Betamethasone Dipropionate Ointment
  15. Carbamazepine ER Tablets
  16. Cefpodoxime Proxetil Oral Suspension
  17. Cefpodoxime Proxetil Tablets
  18. Ciclopirox Cream
  19. Ciclopirox Shampoo
  20. Ciclopirox Solution
  21. Clindamycin Phosphate Cream
  22. Clindamycin Phosphate Gel
  23. Clindamycin Phosphate Lotion
  24. Clindamycin Phosphate Solution
  25. Clobetasol Propionate Cream
  26. Clobetasol Propionate Emollient Cream
  27. Clobetasol Propionate Gel
  28. Clobetasol Propionate Ointment
  29. Clobetasol Propionate Solution
  30. Clotrimazole 1% Cream
  31. Clotrimazole Betamethasone Dipropionate Cream
  32. Clotrimazole Betamethasone Dipropionate Lotion
  33. Desonide Cream
  34. Desonide Lotion
  35. Desonide Ointment
  36. Desoximetasone Ointment
  37. Econazole Nitrate Cream
  38. Eplerenone Tablets
  39. Erythromycin Base/Ethyl Alcohol Solution
  40. Ethambutol HCL Tablets
  41. Fluocinolone Acetonide Cream
  42. Fluocinolone Acetonide Ointment
  43. Fluocinonide .1% Cream
  44. Fluocinonide Gel 
  45. Fluocinonide Ointment 
  46. Fluocinonide Solution
  47. Fluticasone Propionate Lotion
  48. Griseofulvin Microsize Tablets
  49. Halobetasol Propionate Cream
  50. Halobetasol Propionate Ointment
  51. Hydrocortisone Acetate Suppositories
  52. Hydrocortisone Valerate Cream
  53. Imiquimod Cream
  54. Ketoconazole Cream
  55. Latanoprost Drops
  56. Lidocaine Ointment
  57. Methazolamide Tablets
  58. Methylphenidate HCL Tablets
  59. Methylphenidate HCL ER Tablets
  60. Metronidazole Cream
  61. Metronidazole .75% Gel
  62. Metronidazole .1% Gel
  63. Metronidazole Lotion
  64. Mometasone Furoate Cream
  65. Mometasone Furoate Ointment
  66. Mometasone Furoate Solution
  67. Nafcillin Sodium Injectable Vials
  68. Nystatin Ointment
  69. Nystatin Triamcinolone Cream
  70. Nystatin Triamcinolone Ointment
  71. Oxacillin Sodium Injectable Vials
  72. Phenytoin Sodium ER Capsules
  73. Pioglitazone HCL Metformin HCL Tablets
  74. Prochlorperazine Maleate Suppositories
  75. Promethazine HCL Suppositories
  76. Tacrolimus Ointment
  77. Terconazole Cream
  78. Triamcinolone Acetonide Cream
  79. Triamcinolone Acetonide Ointment
  80. Triamcinolone Acetonide Paste


Attorney General Reyes joined the attorneys general of Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Territory of Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin in filing the complaint.

Read a copy of the complaint here.

###

Utah Joins Multi-state Coalition to Unseal Generic Drug Price Fixing Complaint

FOR IMMEDIATE RELEASE
June 7, 2019

UTAH JOINS 44-STATE COALITION IN MOTION TO UNSEAL GENERIC DRUG PRICE FIXING COMPLAINT

Attorney General Sean D. Reyes joined a 44-state coalition in a motion to unseal their complaint against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers. The complaint, filed on May 10 in U.S. District Court for the District of Connecticut, alleges a broad conspiracy to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for more than 100 different drugs.

“I have heard the complaints of Utahans about these inflated drug prices and how this affects their quality of life and ability to obtain medicine they desperately need. My joint action with other state AG’s directly addresses these concerns. Unsealing this complaint and the redacted emails and records will bring answers to Utahans and other concerned Americans and help us hold pharmaceutical companies accountable for their abusive schemes that have negatively impacted so many people across the nation,” said Attorney General Reyes.

This complaint is the second to be filed in an ongoing, expanding investigation that the Connecticut Office of the Attorney General has referred to as possibly the largest cartel case in the history of the United States. The first complaint was similarly filed under seal initially and later released in full with permission from the court. 

###

Utah Joins Lawsuit Against 20 Generic Drug Makers for Price Fixing

FOR IMMEDIATE RELEASE
May 13, 2019

UTAH JOINS LAWSUIT AGAINST TEVA PHARMACEUTICALS AND 18 GENERIC DRUG MAKERS IN CONSPIRACY TO FIX MARKET PRICING FOR DRUGS
AG Coalition Presents Hard Evidence Showing Multi-billion Dollar Fraud on Americans

SALT LAKE CITY – Utah Attorney General Sean D. Reyes joined 44 states announcing a lawsuit against Teva Pharmaceuticals and 19 of the nation’s largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices as well as reduce competition for more than 100 different generic drugs.

“The price fixing case against these pharmaceutical companies has been building for years, and it’s time we hold them accountable for manipulating the market,” Attorney General Reyes said. “It’s outrageous that these companies colluded to inflate prices on generic drugs that should be affordable and increase quality of life for many people, like antibiotics and asthma medication.”

The complaint alleges that Teva, Sandoz, Mylan, Pfizer, and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs.

The lawsuit lays out an interconnected web of industry executives meeting with each other to unlawfully discourage competition and includes emails, text messages, telephone records, and former company insiders reflecting a multi-year conspiracy to fix prices and divide the market share for huge numbers of generic drugs. In some instances, the coordinated price increases were over 1,000 percent.

The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and all classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, and non-steroidal anti-inflammatory drugs. These drugs are used to treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. 

The complaint is the second to be filed in an ongoing, expanding investigation that has been referred to as possibly the largest cartel case in the history of the United States.

In addition to Utah, other joining states include Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin and Puerto Rico.

 # # #

NOTES:

  1. You can find a copy of the complaint here: https://attorneygeneral.utah.gov/wp-content/uploads/2019/05/2019-GDMS-Complaint.pdf.
     
  2. The first complaint is still pending U.S. District Court in the Eastern District of Pennsylvania and includes 18 corporate defendants, two individual defendants, and 15 generic drugs. You can read that complaint here: https://attorneygeneral.utah.gov/wp-content/uploads/2019/05/2016-Generic-Pharmaceuticals-Pricing-Antitrust-Litigation.pdf
     
  3. This case was featured on the Sunday, May 12 episode of 60 Minutes on CBS. You can view that here: https://www.cbs.com/shows/60_minutes/video/_SPbK7pa0HqLvYkr65pLG0cjLDGbZOoJ/the-price-of-generics-the-most-unlikely-meeting-mark-bradford/.
     
  4. The list of corporate defendants is as follows: 1. Teva Pharmaceuticals USA, Inc.; 2. Sandoz, Inc.; 3. Mylan Pharmaceuticals Inc.; 4. Actavis Holdco US, Inc.; 5. Actavis Pharma, Inc.; 6. Amneal Pharmaceuticals, Inc.; 7. Apotex Corp.; 8. Aurobindo Pharma U.S.A., Inc.; 9. Breckenridge Pharmaceutical, Inc.; 10. Dr. Reddy’s Laboratories, Inc.; 11. Glenmark Pharmaceuticals Inc. USA; 12. Greenstone LLC; 13. Lannett Company, Inc.; 14. Lupin Pharmaceuticals, Inc.; 15. Par Pharmaceutical Companies, Inc.; 16. Pfizer, Inc.; 17. Taro Pharmaceuticals USA, Inc.; 18. Upsher-Smith Laboratories, LLC; 19. Wockhardt USA, LLC; and 20. Zydus Pharmaceuticals (USA), Inc.
     
  5. The list of individual defendants is as follows: 1. Ara Aprahamian, Vice President of Sales and Marketing at Taro Pharmaceuticals U.S.A, Inc.; 2. David Berthold, Vice President of Sales at Lupin Pharmaceuticals, Inc.; 3. James Brown, Vice President of Sales at Glenmark Pharmaceuticals, Inc.; 4. Maureen Cavanaugh, former Senior Vice President and Chief Commercial Officer, North America, for Teva; 5. Marc Falkin, former Vice President, Marketing, Pricing and Contracts at Actavis; 6. James Grauso, former Senior Vice President, Commercial Operations for Aurobindo from December 2011 through January 2014. Since February 2014, Grauso has been employed as the Executive Vice President, N.A. Commercial Operations at Glenmark; 7. Kevin Green, former Director of National Accounts at Teva from January 2006 through October 2013.  Since November 2013, Green has worked at Zydus Pharmaceuticals (USA) Inc. as the Vice President of Sales; 8. Armando Kellum, former Vice President, Contracting and Business Analytics at Sandoz; 9. Jill Nailor, Senior Director of Sales and National Accounts at Greenstone; 10. James Nesta, Vice President of Sales at Mylan; 11. Kon Ostaficiuk, the President of Camber Pharmaceuticals, Inc.; 12. Nisha Patel, former Director of Strategic Customer Marketing and later, Director of National Accounts at Teva.; 13. David Rekenthaler, former Vice President, Sales US Generics at Teva; 14. Richard Rogerson, former Executive Director of Pricing and Business Analytics at Actavis; and 15. Tracy Sullivan DiValerio, Director of National Accounts at Lannett.

Photo by Mika Baumeister

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